Popular DNA testing firm 23andMe has filed for bankruptcy protection, and announced that its co-founder and CEO, Anne Wojcicki, has resigned with immediate effect.
The company will now attempt to sell itself under the supervision of a court.
23andMe said in a press release that it plans to continue operating throughout the sale process and that there “are no changes to the way the company stores, manages, or protects customer data.”
The Information Commissioner’s Office (ICO), the UK’s data protection watchdog, said on Monday it had notified the company of its intent to hand down a £4.59m fine over a 2023 data breach.
The ICO, which launched a joint investigation with Canada’s data watchdog into the genetic testing company last June, said the findings were provisional.
And deputy commissioner Stephen Bonner said the regulator was aware of the company’s bankruptcy filing in the US and “monitoring the situation closely”.
“As a matter of UK law, the protections and restrictions of the UK GDPR continue to apply and 23andMe remains under an obligation to protect the personal information of its customers,” he said.
The Attorney General in 23andMe’s home state of California issued a consumer alert on Friday advising customers to delete their data from the site given the company’s “reported financial distress.”
23andMe’s saliva-based test kits were once celebrated among customers and investors, who helped to push the company’s value as high as $6bn (£4.6bn).
But it has been struggling for survival.
Founded in 2006, the company went public in 2021 but has never turned a profit.
In September, the firm settled a lawsuit alleging that it failed to protect the privacy of nearly seven million customers whose personal information was exposed in a 2023 data breach.
In some cases, hackers gained access to family trees, birth years and geographic locations, by using customers’ old passwords. The data stolen did not include DNA records, according to the company.
Two months after the settlement, it cut 200 employees, amounting to 40% of its workforce.
23andMe said its finance chief, Joe Selsavage, will take over as interim chief executive.
Ms Wojcicki will continue to serve as a member of the board.
She had tried to take the company private but was not open to a third-party takeover.
23andMe – which once had high-profile endorsements from the likes of Oprah Winfrey, Eva Longoria, and Snoop Dogg – struggled to redefine its business model.
Customers did not have much to return for once they had paid for a DNA report, and an effort to launch a subscription service proved unsuccessful.
Efforts to use its massive trove of data to move into drug development also faltered.
All of the company’s directors, except for Ms Wojcicki resigned last summer, saying in a letter they were quitting after not receiving a satisfactory buyout offer from her.
Questions around DNA
In its statement on Sunday, 23AndMe’s board chair Mark Jensen said the company is “committed to continuing to safeguard customer data and being transparent about the management of user data going forward”.
He said it would be “an important consideration in any potential transaction”.
But this may not ease concerns of some users about what happens to the DNA they shared with the company.
In the UK, it is considered special category data under data protection laws.
This provides legal protections if a firm goes bust or changes hands.
When a DNA testing company called Atlas Biomed appeared to have ceased trading last year, some customers were left with more questions than answers about what it meant for them.
Prof Carissa Veliz – author of Privacy is Power – previously told the BBC it is arguably the most valuable personal data you have.
“If you gave your data to 23andMe, you also gave the genetic data of your parents, your siblings, your children, and even distant kin who did not consent to that,” she said.
By BBC
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